On 5th April 2021, Byju’s announced the acquisition of Aakash Educational Services Ltd. for an estimate of 1 billion USD in parts of cash and equity. It is one of the biggest strategic mergers in the ed-tech field in the world. Both Aakash and Byju’s are leading brands that educate thousands of students. The merger is one of its kind and something to look out for, as one is among the top education services for the last three decades, and the other is a start-up that blew the ed-tech market with its fast, growing, and demanding systems of teaching.
The acquisition had been in the planning for many months, and finally, it took place officially. The responses of the founders of both parties are positive. Intending to bring a change in the ed-tech sector, this merger is all set to make a shift from old-school methods of teaching to a hybrid one, which is the need of the hour, especially in the times of covid, when education is all tech and internet-based.
What makes Byju’s one of the leading ed-tech companies in India?
Byju’s had been in the headlines several times in the past for its innovative and successful mergers and acquisition. In 2017 it acquired Edurite and TutorVista, and Osmo in 2019. One of its greatest acquisitions before AESL was WhiteHat Jr, a coding training platform for USD 300 million amidst the pandemic when a large majority of the population was stuck at home and found online learning a way to spend time constructively. Since then, Byju’s profits and growth in the market have reached greater heights. In the span of just six months in 2020, from April to September, 45 million new students around the world enrolled in many of the education programmes offered by Byju’s. With a tremendous record of the growth of a start-up launched in the year 2015, Byju’s is among the top ed-tech companies. Founder and CEO, Byju Raveendran in one of the press conferences said that the future of learning is hybrid, and the union of Byju’s and AESL will enable both companies in creating more personalized learning programmes in the future. It is an amalgamation of the best online and offline learning experience for students to have the right combination of technology and education.
Aakash’s expertise in the teaching sector
While Byju’s is a leading education provider in the ed-tech sector, Aakash has expertise in training more than 50 million students since its inception for national-level medical and engineering exams. Every year, hundreds of Aakashians qualify for the entrance exams, making it one of the best and trustworthy education institutes in India. With more than 250 centres across the nation, Aakash has followed and maintained the top quality of its education, and well, the results speak for themselves.
What makes this strategic merger one of the biggest business acquisitions in India?
There are several things about the deal that make it so special and one of the biggest in recent times, both in the national and international market. Let us focus on each one of them one by one:
- The best education via technology: Both Aakash and Byju’s have been consistent with their result in growth irrespective of the everlasting competition from institutes and companies in the field of education. They have built a persistent image with top-quality education and ease in learning.
- Aakash’s expertise in entrance exams: Though education for students is offered by Aakash right from the eighth grade, the main focus is always on the national level entrance exams, in the field of medical and engineering that students appear after 12th standard. Aakash’s expertise in training and providing relevant study materials to students is one of the top reasons why it is still the best among other similar institutions. Byju’s can make the best use out of the resources and expertise available to complement it well with their system of educating students.
- People’s trust in Byju’s e-tech: Byjus’ entire system of training and education is based on technology and e-learning. It has also been pretty consistent in delivering new ways of e-learning like students can get their doubts cleared from personal educators despite it being e-learning and tech-savvy method of education. It has built a platform that is almost similar to learning in a classroom, but at your pace while sitting at home.
- Both are backed by big investors: Big investors of the market like Tiger Global, Sequoia Capital, Tencent, and Chan-Zuckerberg Initiative back Byju’s and there’s also talks about them collectively raising an additional amount of $600-700 million shortly. Aakash doesn’t lack the support of investors too. It ventured into an omnichannel model back in 2019 and raised money from Blackstone by offloading 37.5 per cent stake value. Byju’s and Aakash’s growth in terms of profit has been remarkable, not just because of the right investment and merger plans but also due to the trust they have gained from people over the years by providing the right education in the most efficient manner.
- The shift in the system of learning due to pandemic: Byju’s is one of the top names in the market since the pandemic hit the entire world. Its various courses with the right curriculum and educational benefits are beneficial for learning from home. With still school and colleges being put on shut, e-learning is the only way of learning. Several offline education institutes, including Akash, can not function properly due to the ongoing pandemic, and to overcome this problem, a shift to e-learning only seems like the better alternative to keep the brand going. Since the shift in ways of teaching is so essential to be able to sustain in the market, why not collaborate with one of the biggest e-learning platforms for better results? The combination of study patterns and techniques of both the education services will be of great use for students with the convenience of staying at home.
Byjus’ acquisition of AESL is one of the prime changes in education due to COVID-19. Had the strategic merger not been possible if it were not for the pandemic? That’s still a debatable question. But what suits the need of the hour is, most certainly, fulfilled by it. The year 2020 saw an inflow of over 2 billion USD from equity and venture capital firms in the ed-tech field. The pandemic changed many systems, and this strategic merger is one of its results.